Fed rate policy puts South Korea at risk

The South Korean economy is currently facing downside risks. It’s
because the American Federal Reserve is all geared up towards raising
interest rates, while Korea is busy with overhauling its shipping as
well as shipbuilding industries, as the finance ministry reported on
Thursday.

The ministry stressed in its monthly assessment of the South Korean
economy that growth could be constrained by extensive strikes at
carmakers.

Here we should stress that unionized workers at South Korea's Hyundai
Motor officially rejected a tentative wage deal the previous month,
thus signaling more strikes as well as production losses at its biggest
manufacturing base.

August export data revealed that early this month shipments would
have performed much better had it not been for the car strikes.

Apart from that the ministry statement told domestic consumption was
adjusting to the expiry of some positive government measures, including
tax breaks.